2026-2027 Budget Development - Capital Improvement Plan Direction
No formal vote; work session for continued dialogue. Second work session scheduled May 20, 2025. City Manager to provide preliminary proposal August 19, 2025.
Dissent: No dissent recorded; council expressed shared concerns about process timing and need for benchmarked approach to levy increases.
Council debated two capital funding scenarios ($1.4M vs. $2M annual levy contribution). Primary tension centered on whether to establish a percentage-based levy increase target (tied to property value appreciation, approximately 6-8%) versus making incremental decisions. Council members expressed concern that piecemeal budget discussions prevent understanding of cumulative levy impact until August, when it may be too late to adjust. Staff indicated willingness to provide scenario modeling and pre-August dialogue to prevent surprises. Council requested stack-ranked project priorities to enable informed trade-off decisions.
Utility Franchise Fee Structure - Percentage-Based Model Consideration
No formal vote; work session for continued dialogue. Staff directed to: (1) run scenario analysis with differentiated residential/commercial rates, (2) provide individual property tax examples comparing levy reduction to franchise fee increase, (3) prepare narrative explaining how residents benefit. Ordinance to be drafted for July-August approval to meet January 2026 implementation deadline.
Dissent: No formal dissent; Council Member Carolyn expressed substantive concerns about cost-shifting without demonstrated resident benefit, but indicated openness to proceeding if scenarios demonstrate net savings.
Staff presented two options: updating flat fees or adopting a 4% percentage-based model effective January 2026. The percentage model would increase annual revenue from $2.6M to approximately $4M, with the additional $1.3M potentially offsetting street reconstruction levy costs. Council expressed support for the percentage model because it ties fees to consumption and rewards energy efficiency, but raised concerns about whether the levy reduction would actually benefit residents or simply shift costs. Council requested scenario analysis showing: (1) residential vs. commercial impact comparison, (2) individual property tax examples comparing levy reduction to franchise fee increase, and (3) whether residents would see net tax reduction. Staff indicated ability to run scenarios with differentiated rates for residential vs. commercial classes.
Water Treatment Plant Number Five - Yorktown Park Site Feasibility and Recommendation
No formal vote; work session for continued dialogue. General support expressed for Yorktown Park as site for Water Treatment Plant #5. Staff directed to: (1) proceed with rate study in 2025 to model cost impact on water utility rates, (2) coordinate with Parks Department on Yorktown Park master plan development in 2026, (3) schedule potential construction for 2030 to align with master plan implementation. Building demolition decision deferred pending master plan and future council action.
Dissent: Council Member expressed hesitation about demolishing existing building; suggested deferring demolition decision pending master plan and exploration of alternative uses. No formal opposition to site selection.
Staff presented updated engineering analysis confirming Yorktown Park (current Fire Station #2 location) as viable site for Water Treatment Plant #5. Key findings: (1) existing building cannot be reused due to building code requirements for hazardous chemical storage and water processing; (2) site layout accommodates the facility with skate park remaining; (3) York Avenue provides suitable distribution corridor; (4) storage alone cannot meet future demand—treatment plant is necessary; (5) estimated construction cost is $31.5M including contingency, professional services, and transmission upgrades. Staff recommended proceeding with site selection, conducting rate study in 2025, developing Yorktown Park master plan in 2026, and scheduling construction for 2030. Council expressed general support for the location but some hesitation about demolishing the existing building. No immediate action on building demolition; future decisions will be informed by master plan and rate study.
Tax Increment Financing (TIF) Districts - Policy Direction on Fund Use
No formal vote; work session for continued dialogue. Staff directed to schedule policy discussion when full council complement is present. Decision deferred pending state-level interchange project funding determination. No impact on 2026-2027 budget proposal.
Dissent: No dissent recorded; council expressed shared interest in establishing clear policy direction.
Staff provided update on approximately $8M in accumulated TIF funds from Centennial Lakes and Southdale 2 districts. Council discussed whether to continue using these funds as discretionary rainy-day reserves (past practice) or redirect them back to original TIF purposes. Staff noted that decision will not impact 2026-2027 budget proposal and is awaiting state-level interchange project funding determination. Council indicated desire to establish clear policy direction on TIF fund use to avoid recurring flux in decision-making. No immediate action taken; staff indicated conversation can occur when full council complement is present.
Human Services Task Force - Deferral and Contract Extension
No formal vote; work session for continued dialogue. Staff directed to extend existing human services contracts into spring 2026. Task force will be reconvened in spring if council directs following August budget review.
Dissent: No dissent recorded; council accepted staff recommendation.
Staff recommended deferring the annual human services task force to allow council more time to review the August budget proposal before making funding decisions. Rather than conducting a task force now, staff will extend existing contracts into spring 2026, with task force potentially reconvening then if council directs. This approach avoids the work of a task force only to have council potentially reduce funding based on budget constraints.